The SIMPLE plan will be very helpful for small firms that want a retirement plan with minimum hassle or and minimum cost. In recent years a number of companies with less than 100 employees have started traditional 401(k) plans but then found that they did not get results they expected from plan. These firms are statistically too small to support a 401(k) plan with their cumbersome set of rules and restrictions. In addition, 401(k) plan administrative costs often ran much higher than employer originally expected. Many of these companies now unhappy with cost or service with their current 401(k) plans are expected to switch to new SIMPLE plan.

Another advantage is that SIMPLE plans can be funded with no-load mutual funds chosen by investor that result in significant saving to employees over time. In contrast, most 401(k) plans use heavily commissioned investments or charge substantial administration fees.

SIMPLE plans can be an effective tax saving tool for business owners. A high-income business owner could save up to $5,500 in taxes in a single year on contributions of up to $13,000 in his own account without making contributions to other employee’s accounts if other employees decline to participate. (Typical tax savings are $2,000 per year for a middle-income participant). This tax benefit favoring owner is not possible with other types of retirement plans available today. The employer’s cost for matching contributions in a SIMPLE plan currently averages about $600 per year per employee because not all of employees will participate in plan. This is far less than cost of most 401(k) or SEP plans.

If an employee contributes only $25 per week (with contributions matched by employer) account will grow to provide a retirement income of about $125 per week after just 10 years of contributions.

DIRECT CONVERSION of your medical insurance is available with most insurance companies regardless of whether you use COBRA or not. If you are on a group insurance policy, simply call your insurance company and ask them if you can convert to an individual insurance policy. Do this as soon as possible after you know that you are being laid-off. Sometimes this option is less expensive than COBRA and may give you access to a wider range of plan options like low cost, high deductible catastrophic coverage. But also be aware that many auxiliary benefits like dental insurance will not be available.

SHORT TERM MEDICAL INSURANCE is easy to purchase in most states. This is usually much less expensive than COBRA but it does not cover expense for any pre-existing medical condition. It would not be appropriate, for example, if you were pregnant. Most of these policies today are purchased directly on Internet. www.MedSave.com offers short term medical coverage to residents of 46 U.S. states and foreign countries. Despite name “short term”, you can usually re-apply for this insurance when it expires and thereby continue to do this for as long as you need it.

For INTERNATIONAL COVERAGE, you need a separate type of policy since most U.S. policies do not provide significant coverage overseas. This coverage is also inexpensive and easy to buy online. You can specify your departure date and return date so that you pay for only coverage that you need.